Alibaba is planning to make comprehensive improvements to its major mobile artificial intelligence applications in the coming months, aiming to bring them closer to OpenAI's ChatGPT. This is a crucial step in its larger-scale competitive strategy, designed to compete with rivals and ultimately generate revenue from individual users.

U.S.-listed shares of the company rose 5% in premarket trading.

According to informed sources, Alibaba plans to first update the existing "Tongyi" applications on iOS and Android systems and rename them "Quwen" (taken from the company's renowned AI model). Subsequently, these sources stated that Alibaba will gradually add proxy AI functionality to multiple platforms, including the main Taobao platform, in the coming months to support e-commerce operations. These sources requested anonymity as this is internal discussion content.

The end goal is to try and make Qwen a fully functioning AI agent, the people said, a prime objective for the industry both in the US and China. Alibaba plans to eventually expand globally with an overseas version, the people said. It’s dedicated more than 100 developers from around the company to the makeover over past months, as part of additional AI investments that Chief Executive Officer Eddie Wu teased in September, the people said.

The Qwen revamp marks one of Alibaba’s biggest moves so far to try and wring revenue from consumer-facing services. The Chinese e-commerce firm has joined rivals from startup Minimax to ByteDance Ltd. in rolling out ever-more advanced AI models, each trying to outdo sector leaders like OpenAI and DeepSeek on performance.

But for many companies, the monetization model has largely been focused on serving businesses with deeper pockets, rather than Chinese consumers less comfortable with paying for online services. In Alibaba’s case, Qwen also lags behind ByteDance’s Doubao and Tencent Holdings Ltd.’s Yuanbao in terms of user popularity. By incorporating shopping features, Alibaba may be hoping to use its traditional strength in e-commerce to draw users in.

Alibaba operates not just the Tongyi consumer apps but also “Qwen Chat” on both iOS and Android, though the latter has less functionality. The idea is to streamline the look and feel for consumers under the Qwen banner and make it the go-to app, the people said.

The revamped Qwen app will remain free to users for now, according to the people. But building a user base will help Alibaba charge for consumer-facing services in future. Beyond revenue, the creation of a one-stop shop for mobile users could also burnish its brand in an overcrowded market.

From Huawei Technologies Co. to Tencent, China’s biggest tech companies are pouring unprecedented sums of money into AI. They join a wave of spending by American counterparts from OpenAI to Meta Platforms Inc. seeking to build and popularize a technology with the potential to transform economies and tip the world’s geopolitical balance.

In September, Wu outlined his own plans to roll out new models and “full-stack” AI technology, reflecting Alibaba’s ambitions to both develop services and the infrastructure — such as chips — that underpin the technology.

Alibaba had previously attempted to bring its artificial intelligence technology to consumers. Earlier this year, the company upgraded its search application "Kuaqiu" and planned to turn it into an all-round artificial intelligence assistant. The application will still be available for users to use.

In the most recent quarter, Alibaba reported that its artificial intelligence-related products achieved triple-digit growth. The sales of its cloud business division also exceeded expectations, becoming the fastest-growing department within the group.